$B m 717
EDWIN WEXLER KENNEDY.
A Dissertation Presented to the Board of University
Studies of the Johns Hopkins University in
Conformity with the Requirements for the
Degree of Doctor of Philosophy.
THE J. W. BOND CO.
EDWIN WEXLER KENNEDY.
A Dissertation Presented to the Board of University
Studies of the Johns Hopkins University in
Conformity with the Requirements for the
Degree of Doctor of Philosophy.
THE J. W. BOND CO.
The aim of this monograph is to present a study in the
colonial history of North Carolina, along two lines of thought :
(i). The History of Quit-rents, (2). The History of Currency.
Although these topics are economic in their character, they
had no small influence on the political development of the
State. They were elements in the estrangement which grad-
ually grew between the mother country and the colony, and
their history forms a part of the general history of the period.
In offering this work to the public I desire to acknowledge
my indebtedness to Judge Robert W. Winston, of Durham, N.
C., to Doctor John C. Kilgo, President of Trinity College, N.
C., and to Hon. S. G. Gilbreath, ex-State Supt. of Public Instruc-
tion of Tenn. E. W. K.
CHAPTER I. QUIT-RENTS.
In 1663 Charles II, as feudal lord of the land which he held in
America by the right of discovery, granted to eight persons as
tenants-in-chief that portion of land in America lying between
thirty-one degrees and thirty-six degrees, north latitude, and
the Atlantic and Pacific oceans, (i) In 1665 the grant was ex-
tended on the north to thirty-six degrees, thirty minutes
and on the south to twenty-nine degrees, north latitude.
(2.) By the terms of the grant these persons were created
Lords Proprietors with absolute sovereignty "saving always
the faith, allegiance, and sovereign dominion, due us, our
heirs and successors." (3) They were "to have, hold, use f
exercise, and enjoy the same (their privileges) as amply,
fully and in as ample manner, as any Bishop of Durham,
in our Kingdom of England ever heretofore had, held,
used, or enjoyed, or of right ought, or could, have, use or enjoy."
(4) It was provided that the Lords Proprietors should hold the
lands "in free and common socage and not in capite or by
knight service," subject to the payment annually of one-fourth of
the gold and silver which should be found therein, and an annual
quit-rent of twenty marks. (5) They were authorized to grant
land in fee-simple, fee-tail, term of life or years, at such rents,
services or customs as they desired, the statute of quia
emptores to the contrary notwithstanding. (6). It was the
desire of the Lords Proprietors to transport subjects of the
British crown from the Kingdom of England and from other
countries subject to England, to Carolina, for the purpose of
forming a colony for the "propagation of the Christian faith and
the enlargement of our empire and dominions." (7).
(1) Colonial Records of North Carolina I, p. 21. Hereafter cited as C. R. (2) C. R.
I, p. 104. (3) C. R. I, p. 103. (4) Bassett's "The Con. Beginnings of N. C.," p. 20, C.
R. I, p. 103, (5) C. R. I, p. 104. (G) C. R. I, p. 110. (7) C. R. I. p. 21.
In pursuance of this purpose, in the same year in which the
colony came into their possession, the Lords Proprietors made
an announcement to the public entitled "A Declaration and
Proposals to All That will Plant in Carolina," in which they
stated, "We will grant to every present undertaker for his own
head one hundred acres of land, to him and his heirs forever,
to be held in free and common socage ; and for every man
servant that he shall bring or send thither, that is fit to bear arms,
armed with a good firelock musket, performed bore, twelve
bullets to the pound, and with twenty pounds of powder, and
twenty pounds of bullets, fifty acres of land ; and for every
woman servant thirty acres ; and to every man servant that
shall come within that time, ten acres after the expiration of his
time, and to every woman servant six acres after the expiration
of her time." (8). These propositions were limited to five
years, commencing at the time of the first settlement. (9). The
lands so granted were to be held subject to the payment of an
annual quit-rent of one half-penny per acre, four shillings, two
pence per hundred acres. (10). In 1667 the Lords Proprietors
made a proposition to grant sixty acres of land to every head of a
family, male or female, sixty acres for every male servant able
to bear arms and equipped in a specified manner, and fifty
acres each' for other servants composing his or her family, the
quit-rent thereon being one half-penny per acre. (n). In the
northeastern part of the colony settlements were made by
people who held their lands under titles granted by the gov-
ernor of the Colony of Virginia at one farthing per acre. In
1679 the Lords Proprietors instructed President Harvey and
Council to confirm these grants. (12.) Others of the original
settlers purchased their lands from the Indians. This part of
the colony became Albemarle county, from which grew the
State of North Carolina. The assembly of this county peti-
tioned the Lords Proprietors concerning the payment of quit-
rents. In 1668, in answer to that petition, they made what is
generally known as the "Great Deed of Grant." This instru-
ment secured to them, their heirs and assigns forever, their
lands "upon the same terms and conditions that land is at
present usually granted in Virginia." (13). The law of Vir-
ginia at this time permitted the tenant to hold his or her land
subject to the payment of a quit-rent of two shillings a hun-
dred acres, payable at the home of the tenant in tobacco at a
penny a pound. (14). In 1669, the Lords Proprietors, accord-
(8). C. R. I, p. 45. (9). Ibid, p. 45. (10). Ibid, p. 46. (11). C. R. I, p. 156. C. R. V,
p. 93. (12) C.R.I, p. 338. (13) C- R. Ill, p. 480, 481. (14) C. R. IV, p. 109.
ing to the one hundred and thirteenth article of the Funda-
mental Constitutions, stated that, "Whosoever shall possess any
free-hold in Carolina, upon what title or grant soever, shall at
the farthest, from and after the year one thousand six hundred
and eighty-nine, pay yearly unto the Lords Proprietors, for
each acre of land, English measure, as much fine silver as is at
this present time in one English penny, or the value thereof, to
be as a chief rent and acknowledgement to the Lords Proprie-
tors, their heirs and successors forever/' (15). In 1694 the
Lords Proprietors instructed Governor Archdale to sell land in
the colony, reserving an annual quit-rent of one shilling per
hundred acres for some, and four shillings and two pence for
other lands. (i6). In regard to the lands lying north of the
Cape Fear he was authorized to use his own discretion as to
the rate of quit-rent, provided it should not be less than a half-
penny per acre. (17). In 1708 the governor was instructed to
grant land at a quit-rent of a half-penny per acre, with the pro-
viso that no person should have more than six hundred and forty
acres. (18). In 1663 an island, about five miles long and two
miles in width, lying near the mouth of the Albemarle river,
was granted to Sir John Colleton at a quit-rent of a half-penny
per acre for all tillable lands, provided that "all others that
shall plant in North Carolina pay as much." (19). The gov-
ernors were not always obedient to the instructions of the
Lords Proprietors. They so abused the power entrusted to
them that the Lords Proprietors in 1715 ordered that the land
office should be closed, and that the land should be sold only
by themselves in London. (20). In violation of this order the
governor and council in 1724 allowed people to take lands in
Bath County at three shillings per hundred acres. When the
Royal period began, the King instructed the governor of the
colony that thereafter the rate of quit-rents should be four
shillings per hundred acres. (21).
THE QUIT RENT ROLL.
The quit-rent roll was a list of names of persons holding land
in the colony subject to the payment of quit- rents, showing the
location of the land, the number of acres, the rate, and amount
of quit-rents to be paid by each person. The method of secur-
ing land in the colony was very simple. The colonist petition-
ing for a grant of land was required to prove his right before
the Governor and as many as four members of the council not
(IB) C. R. I, p. 204. (16) C. R. I, p. 390, C. R. V, p. 94. (17) C. R. I, p. 391. (18) C. R.
V, p. 94. (10) C. R. I, p. 55. (5JO) C. R. V, p. 95. (rilj C. R. V, p. 96.
having any interest in the land. If the land was granted, the
warrant was issued by the Governor in council, and recorded in
the auditor's office. The warrant was returnable by the surveyor
within a year. When the warrant was returned the grant was
made and was required to be registered in the secretary's office
within six months. (22.)
In 1713, Governor Pollock and his council met at the resi-
dence of the Governor in Chowan precinct, and in compliance
with the requirements of the Lords Proprietors concerning the
formation of a quit-rent roll, appointed five persons from Cho-
wan, two from Perquimans, four from Pasquotank, two from
Currituck precincts, and four from Bath county, to take a list of
all lands held in their respective precincts, showing how the land
was held, how long held and what rent was due. All
persons were required to appear before these listers and
give on oath the required information by the last day
of October of that year. The lands of all persons who
failed to comply with this requirement were to be con-
sidered forfeited and subject to be entered as though no one
had ever held them. (23.) In 1726, Edward Moseley, the Sur-
veyor General, reported to the Governor and council a list of
all the grants of land recorded in the office of the secretary of
Albemarle county, for the purpose of forming a rent roll. The
secretary was ordered to have copies made with the addition of
the more recent grants for the use of the collectors. (24.)
The difficulty of forming a rent roll was not only due to the
settlers but to the officers of the colony. Governor Everard in
1729 sold four hundred thousand acres of land at twenty
pounds a thousand, to pay the expenses of the commissioners
for running the boundary line between the colony and Virginia.
The grants were duly signed and sealed, but the names of the
grantees, the number of acres,. and the amounts paid, were not
specified. The lands were not described, nor had they even
been surveyed. (25). Governor Burrington, the first royal
governor, was instructed by the King to give his consent to an
act of the assembly to remit all arrears of quit-rents, payable
to the Lords Proprietors, which were included in the King's
purchase, provided that all land-owners in the colony should
register their grants in the auditor's office, and should in the
future pay the rate of quit-rents specified in the original
grant. The requirements of the King were not satisfactory to
the colonists. They refused to re-register their lands, and the
(22) C. R. V, p. 100. (23) C. R. II, p. 35. (24) C. R. II, p. 603. (25) C. R. IV, p. 266.
C.R. V,p. 95.
quit-rent roll remained incomplete. Other efforts were made
from time to time to secure a satisfactory law for the formation
of a quit-rent roll, but a lack of harmony between the depart-
ments of 'the assembly prevented. In 1738 the assembly
passed an act for forming a quit-rent roll. The Governor signed
it, but it was annulled by the King in council. (26). In 1748
an act was passed by the assembly providing for the formation
of a quit-rent roll. The act required that all persons except
orphans, minors, and persons beyond the sea, who held land in
the colony and grants from the Lords Proprietors not
registered, should register them within a period of twelve
months. The lands in the territory belonging to the
King were to be registered in the office of the
Auditor General, or in the office of the clerk of the
county court where the lands were situated. Those who
held land in the territory of Earl Granville were to register such
lands as were not entered, in his office or in the office of the
clerk of the county court where the lands were situated. All
patents which were not registered within the specified time were
to be considered void. All registers were required to report
annually to the Auditor General or Earl Granville's agents re-
spectively, a list of the transfers of land in their respective coun-
ties, specifying the names of persons, the number of acres, the
situation of the land, and the date of the transfer. It was re-
quired that the secretary make a similar report of the wills. (27).
In a report of the condition of the colony made to the Lords
Commissioners for Trade and Plantations in 1761, it appears
that the quit-rent roll was then incomplete. (28). The auditor
up to this time had not kept a register of the grants of land.
He had only a partial list which was taken from the record of
the secretary. One thing that augmented the difficulty in mak-
ing a quit-rent roll was the variety in the size of the grants of
land. The amount of land the early settlers received depended
upon the number of servants they imported. The number of
acres allowed for each person varied from time to time. In
1708 the Lords Proprietors instructed the Governor to limit
the grants to six hundred and forty acres (29.) In 1715, the
assembly passed an act prohibiting a surveyor from surveying
more than that number of acres in one tract. In 1736, the King
directed that one million two hundred thousand acres of land be
granted to Henry McCulloh and others. In accordance with
which, this number of acres was taken in ninety-six grants of
(26) C. R. V, p. 100. Iredell, 57. (27) Iredelt, 121, 134. (28) C R. VI, p. 618. (29) C.
R. V, p. 94.
twelve thousand five hundred acres. (30.) Henry McCulloh re-
ceived eight tracts of twelve thousand five hundred each, situated
on the "branches of the Nues and Tarr rivers." (31.) These
grants were made with the idea of settling French protestants,
two hundred acres of land being allowed to each person. (32.)
It is not surprising that it was so difficult to keep records of the
grants of land when we remember that the colony was for many
years without a capitol. The assembly met from place to place,
at Bath, Edenton, Newberne, and Wilmington. The meetings
were held in private houses. There was no place where the
records could be kept with safety. The officers often lived far
from each other. Governor Gabriel Johnston in a letter to the
Board of Trade, dated December 28th, 1748, said: "The public
records lie in a miserable condition, one part of them at Eden-
ton near the Virginia Line, in a place without Lock or Key; a
great part of them in the Secretary's House at Cape Fear,
above Two Hundred Miles Distance from the other, Some few
of 'em at the Clerk of the Council's House at Newbern, so that
in whatever part of the Colony a man happens to be, if he
wants to consult any paper or record he must Send Some Hun-
dred of Miles before he can come at it." (33.) The colonists were
careless in keeping and auditing the accounts of public busi-
ness, but they were not much more so than, the Mother Country
seems to have been, for from 1714 to 1802 England made no reg-
ular statement of her financial condition. It was not until after
1822 that a regular annual financial statement of income and
expenditure was made to Parliament. (34.) This example may
have had some influence on the colonists.
THE COLLECTION OF QUIT-RENTS.
The early settlers of North Carolina were probably required
to pay their quit-rents in money, while the colonists of Virginia
were permitted to pay theirs in tobacco. (35.) In 1668 the Lords
Proprietors, in answer to a petition made by the Assembly of
Albemarle county concerning the payment of quit-rents, granted
the inhabitants of that county permission to pay their quit-rents
in tobacco. The colonists offered other commodities as
well, which were accepted by the receivers and disposed of
according to the direction of the Lords Proprietors. This
method of payment was not so unfavorable to the Lords Pro-
prietors when the settlements were made along the Albemarle
(30) C. R. V, p. 104. $1) Deed owned by Mrs. Maggie I,. H. Hicks, Nashville,
Tenn. (32) C. R. V, p. 104. (33) C. R. IV, p. 1165. (34) C. R. Ill, pp. 480, 481. (35) C.
R. IV, p. 109.
and Pamlico Sounds and the rivers running into them. The
commodities could be easily and quickly transported. But when
the interior of the colony was settled this method became im-
practicable. One defect of this system, which is not to be
wondered at, considering the times, became evident: the first
fruits, the best of the commodities, were not scrupulously
reserved for the rent collectors. (36.) In 1715, an act was
passed by the Assembly requiring all goods in distress for quit-
rents, to be valued by four free-holders under oath, and in the
event the goods were not redeemed within ten days, they should
be received at that value by the person in whose interest the
distress was made. (37.) The data at hand is not sufficient to
make an accurate exhibit of the collections of the quit-rents during
the proprietary period. The first regular statements of the Re-
ceiver Generals we find, were made after the Lords Proprietors
sold their interests in the colony to the King. The amount of
arrears of quit-rents was not large at that time. The payment of
quit-rents during this period was made largely in commodities.
The Lords. Proprietors had houses indifferent parts of the colony
for storing the produce which they received in payment of lands
and quit-rents. (38.) Williamson says: "The rent of land on
Salmon Creek was assigned by law to Governor Ludwell for the
payment of his salary." (39.) In 1733 the King in order to
encourage his officers in the collection of quit-rents established
a list of salaries which was to be paid out of the quit-rents, (40.)
but the officers were so careless in the matter that
the amount collected was not sufficient to satisfy these
claims. The Receiver General collected ,4,200 of back rents
from 1729 to 1736. According to the report of the Receiver
General from 1735 to 1748, including both years, there was
collected the sum of ,13,356, 173. 9d. sterling, which was an
average of about ,954 a year. (41). The collections from 1741
to 1745, inclusive were ,4,003, is. 2d., an average of about
.800, 35. 19 3~5d. a year. (42). Governor Gabriel Johnston
granted during his administration up to July i2th, 1743,
1,047,000 acres of land which should have produced a quit-
rent of ,2,094 m addition to the amount of quit-rents from
grants made during the proprietary period. (43). The receipts
from 1745 to 1748, inclusive, were ,1,261, 75. id., an average
(36) C. R. IV. p. 931. (37) C. R. IV, p. 678. (38) Williamson's Hist, of N. C., Vol. I,
p. 163, (39) Ibid. p. 164. (40) C. R. V, pp. 97, 20, 77. (41). C. R. V, p. 20. (42). C. R. V,
p. 101. (43). C. R. IV, p. 1136.
Governor, ^"1,000; Auditor, ,"100; Chief Justice, /"70; Baron, /"40; Surveyor
General, ^40; Secretary, /'TO; Attorney-General, ^80; Clerk of Crown, ^25;
Charges for the Exchequer, ^"30; Total, ^"1,455.
of .323, 6s. 9^(d. a year. (44). The amount collected be-
tween May 1 4th, 1751 and October 5th, 1751, was ,161, 8s.
(45). It is evident from these figures that the amount of col-
lections decreased after the salaries of officers were made pay-
able from the quit-rents. It appears from a report made to
the Lords of the Treasury in 1753 that the colony owed the
widow of Governor Johnston more than ,13,000 sterling, pay-
able from the quit-rents. (46.) In 1754 Governor Dobbs re-
quested the Board of Trade to represent to the King the
necessity of making other provision for the support of the
government until the collections should be adequate to pay the
debts and meet the expenses of the government. (47). The
great decrease in the collection of quit-rents was largely due to
the grant made by the King to Earl Granville in 1744 of that
part of the colony of North Carolina lying between thirty-five
degrees, thirty-four minutes and thirty-six degrees, thirty min-
utes, north latitude. (48). This transfer of territory placed
more than one-half of the colony in the possession of Earl
Granville. Another cause that militated against the collection of
the quit-rents was the lack of a quit-rent roll. About the middle of
the eighteenth century there was a great influx of immigrants
from Scotland, Ireland and Moravia, which added greatly to the
development of the colony. The increase in the collection of quit-
rents is noticeable, notwithstanding the demoralization of the
French and Indian war. The report of the Receiver General for
two years, from March 25th, 1770, to March 25th, 1772, shows
a collection of ,2,242, 73. 9^2 d., an average of ,1,121, 53.
lod. a year. (49). This shows a decided increase in the
collection of quit-rents. The officers of the Crown, who were
land-owners, were negligent in the payment of their quit-rents,
and yet they demanded the payment of their salaries out of the
quit-rents, as though they owed nothing. (50). The report of
the Receiver General for the year ending March 25th, 1773,
shows a quit-rent collection of ,996, 6d. (51). At this time
there was due to the officers of the colony the sum of ,11,388,
6s., 3d., which was to be paid from the quit-rents. (52).
THE ADMINISTRATION OF QUIT-RENTS.
The rate of quit-rents each person was required to pay was
determined from the grants. (53). The only fiscal importance
of the quit-rents lay in the fact that the Crown officers of the
colony were paid from them. They were to be collected and
(44). C. R. V, pp. 78, 101. (45) C. R. V, p. 21. (46) C. R. V, p. 22. (47) C. R.V, p. 78.
(48) C. R. V, p. 101. <4'J) C. R. IX, p. 650. (50) C. R. IX, p. 646. (51) C. R. IX, p. 60!).
(52) C. R. IX, p. 655. (53). C. R. VII, p. 484.
accounted for under the supervision of the Receiver General,
who was appointed by the Lords Proprietors during the the
proprietary period and by the Crown thereafter. He received
no salary, but was allowed a commission of ten per cent, on all
receipts, and in some cases a certain fee for distraining. (54).
It was his duty to disburse the receipts according to the instruc-
tions of the Lords Proprietors during the proptietary period,
or of the King during the royal period. (55). He was required
to account to the governor and council for all such sums. (56).
His deputies were appointed by and were responsible to him
for all collections. (57). They were allowed a commission of
five per cent. Each deputy was required to give bond of
;i,ooo for the faithful performance of the duty of his office.
(58). Their reports were to be made to the Receiver General
annually. In addition to the collections, they were to report to
him all grants not on the quit-rent roll. (59). Later the sheriffs
became the collectors of the quit-rents, and were allowed a
commission of five per cent. (60). The chief duties of the
office of auditor were to certify and enter the warrants for
lands, (61) to audit the patents of land, (62) to audit the
accounts of the Receiver General, to issue "debentures" to the
officers whose salaries were to be paid from the quit-rents, (63)
and to prepare a quit-rent roll for the Receiver General. (64)
The auditor did not receive a salary, but was to be paid certain
fees which were established by the Assembly. (65). The duties
of the office in the colony were performed by a deputy auditor.
(66). There was in addition to these officers a commissioner
appointed by the Crown, whose duty it was to supervise, in-
spect, and control, the revenues and grants of land in North
and South Carolina. (67).
In concluding the study of quit-rents, it is proper to state that
the colonists, so far as we have evidence, never denied their ob-
ligations to pay the quit-rents, but questions of rate, of how and
where the rents should be paid, were the causes of no small
amount of trouble. The Governor claimed the right to deter-
mine what should be offered in payments and where the pay-
ments should be made. (68.) It had been customary in the
early days of the colony, when money was scarce, for the
(54) C. R. VI, p. 756. (Y5) C. R. VIT, p. 484. "The State Records of N. C." Vol. XI,
p. 5. (56) C. R. VIII, p. 150. (57) C. R. V, p. 422. (58) C. R. V. p. 422. (5J>) C. R. V,
p. 423. (60) C. R.VI. p. 621. (61) C. R.VII, p. 484. (82) C. R. VII, p. 485. (63) C. R. VII,
p. 484. (64) C. R. V,p. 588. (65) C. R. VII, p. 485 : C. R. IV, 1128. <,f*6) C. R. VII, p. 484.
<67) "The State Records of N. C .," XI, p. 31. (68) C. R. Ill, vi.. C. R. IV, xiv.
colonists to pay their quit-rents in commodities and on the plan-
tations where they were produced. In Governor Johnston's
administration a bill was pending in the Assembly determining
four places for the payment of these dues. The House of Bur-
gesses refused to agree to it. Thereupon the Governor issued a
proclamation determining where the quit-rents were to be paid
and also the rates at which the commodities were to be received.
(69.) The House of Burgesses protested, but their protest was
ineffectual. The collectors were obedient to his proclamation.
(70.) The following year the House of Burgesses petitioned for
permission to present their grievances. (71.) The Governor
ignored the petition. The collectors continued "to destrain for
the rents." Whereupon the Assembly ordered the collectors to
be placed in custody. Then, according to the record, "His Ex-
cellency being now come to the Upper House, and having sent a
message to command the immediate attendance of the House of
Burgesses, they not paying obedience thereto, His Excellency
was pleased to send another message to them; but they still
neglecting to give their attendance, His Excellency then by and
with the advice and consent of His Majesty's Council, prorogued
the General Assembly to the first day of March next, then to
meet at New Bern." (72.) This event occurred in 1736. This
vigorous act of the Governor did not settle the question at issue.
The people were determined in their demands. In 1739 the
Governor realized that it would be impossible to collect the quit-
rents unless it should be done in a manner acceptable to the
people. Accordingly, an act was passed by the Assembly (73)
in which there were two notable concessions. (74.) The first
was the agreement to refer the matter of determining the value
of paper currency to a committee consisting of the Governor,
members of the Council, the Attorney General and the Receiver
General, and a like number of members of the House of Bur-
gesses. The other concession was concerning the number of
places at which the payments should be made, of which the Gov-
ernor said "it could have been wished were fewer in number,
but there was no possibility of avoiding it." (75.) But, finally
in 1740, the King refused to sanction the act.
In 1741, an unsuccessful effort was made to pass a Quit-rent
Act. (76.) In 1744, at a meeting of the Assembly a "Committee
on Propositions and Grievances" presented the following resolu-
tions, which the House endorsed: "Resolved by this Com-
mittee that no produce of this province being accepted in pay-
(69) C. R. IV, xiv. (70) Ibid. (71) C. R. IV, xv. (72) C. R. IV, xvi. (73) C. R. IV,
xvii. (74) C. R. IV, xvii. (75) C. R. IV, xvii. (76) C. R. IV, xvii.
ment of quit-rents of late years, nor the current bills at less than
10 for i, which is equal to sterling money, as this from the great
scarcity of silver and gold puts it entirely out of the power of
the greatest part of the inhabitants of this province to pay their
quit-rents being contrary to the Grand Deed and also of law of
this province is a Very great grievance." (77.)
In 1755 the quit-rent question came up again in the Assembly
and an act was passed which authorized the land owners to pay
their quit-rents in inspector's notes for tobacco and indigo. (78.)
It seems from a letter written by the Earl of Dartmouth to
Governor Martin, that the King had under consideration an act
passed by the Assembly concerning the quit-rent question as late
as 1774, the year before that assigned to the Mecklenburg De-
claration of Indendence. (79.) After the outbreak of hostilities
the whole question passed beyond the influence of the King for-
(77) C. R. IV, xvii. (78) C. R. V, 458. (79) C. R. IX, 834.
CHAPTER II. CURRENCY.
The history of the currency of North Carolina during the
colonial period is not the least important phase of her growth.
It furnishes a fertile field of instruction to the historian as well to
the economist, although, in general, the financial history of
that colony is similar to others. They all experienced one thing
very early in their development : they felt the need of some
means of facilitating the exchange of the products of their
industry. The great variety of means to which they were
obliged to resort is interesting to observe. How they accom-
plished so much with their little money and limited resources is
indeed wonderful. In North Carolina as in the other colonies
the early settlers were primitive people and their surroundings
were of like nature. Their wants were few and simple. They
came principally from Virginia. Their motives were economic
as well as political. They were soon able to supply in a great
measure their own wants from their new and fertile fields. But
as the colony grew in numbers and in wealth and as the division
of labor took place, they naturally became more dependent on
money and felt more sensibly the need of an increase in the volume
in circulation. As the colonists ceased producing all they con-
sumed, they became more and more dependent on the products
of the labor of others to supply their wants. This division of
labor, in the scarcity of money, necessitated the exchange of one
commodity for another. Trade sprang up and something more
than barter was necessary to meet its demands. The double
coincidence of barter became a burdensome barrier to the pro-
gress of the colony. It is instructive to study the variety of
plans the colonists adopted in their attempts to evolve a circu-
lating medium adequate to the increasing demand of trade. In
doing this, we shall include in the term, currency, anything that
performs the functions of money, from cheese to gold, (i.)
GOLD AND SILVER.
North Carolina coined no money during her colonial period.
The sovereign claimed the prerogative of coining all the gold
and silver, and his claim was sanctioned by constitutional and
(1) Gibbon in "Walker's Political Economy." p. 124.
by civil law. (2.) The early settlers doubtless brought some
gold and silver with them. The foreign trade of the colony,
which owing to the inaccessibility of her harbors was not so
great as that of some of the other colonies, and her trade with
New England, the West Indies, Virginia and South Carolina,
enabled her to accumulate the coinage of other countries. (3.)
There was an appreciable amount of coin in circulation in the
colony in the early part of the eighteenth century. President
Rowan, who had been a merchant, said in 1733 that
he had taken more than one hundred pounds weight
of silver at one time to England. (4). Of the amount of coin
then in circulation, a part was due to the illicit trade existing
between the colony and the West Indies. (5). The colonists
added much to their circulation through the trade which was
carried on with the pirates who infested the coasts of the
colony and West Indian waters. It is not surprising that it was
difficult for the colonists at that early time to discriminate be-
tween privateering and pirating, since some of these pirates
held commissions from the English government to prey upon
the commerce of their enemies, the Spanish. These bold sea
rovers would seize the vessels they met and take them into
their hiding places. Often their spoils consisted of money and
other precious freight. Hughson says, "For many years after
the founding of Carolina, most of the currency in circulation was
the gold and silver pieces brought in by the pirates and priva-
teers from their cruises in the West Indian waters." (6). It is
not unreasonable to suppose, judging from the extensiveness
of her foreign, domestic and colonial trade that North Carolina
had in circulation about the same kind of gold, silver, and
other coins as was in circulation in the other colonies. The
principal part of her supply came from England, Spain and
Portugal. There was, therefore, a variety of coins in the
colony. The foreign coins had no standard value. This was
determined by the contracting parties. In 1704 Queen Anne
issued a proclamation for the purpose of regulating the value
of the different coins then in circulation throughout the Eng-
lish colonies. The following table (8) shows the kind of coins,
their weight, and the value in English money at which she
wished each to pass :
(2) Jevons' "Money and the Mechanism of Exchange," p. 65. (3) C. R III, p. 50.
(4) Spencer's "First Steps N. C. History," p. 72. (5) "Whitney's "Government
of the Colony of S. C.," p. 110 (6) Hughson's "The Carolina Pirates and Colonial
Commerce," p. 14. Hawk's History of N. C., Vol. II, p. 271. (7) Evon's History
of U. S. Mint and Coinage," p. 59. (8) Postlethwayt's "Dictionary of Commerce,"
Seville pieces of eight, old plate, weight
" new "
Mexico " " " ....
Pillar " " "
Peru " " old plate, "
Cross dollars, "
Ducatoonsof Flanders, "
Ecus of France or Silver Lewis, " ....
Crusadoes of Portugal, ' *
Three Guilder Pieces of Holland, "
Old Rix dollars of the Empire, " ....
The fractional parts were to be proportional in value to their
denominations, and light weight pieces to their weight. It was
doubtless far from her intention to make these coins legal tender.
Such a course would not have been advantageous to her own
currency. She knew that the best money would render the
best service in controlling the markets of the world. Conse-
quently she placed the value of the foreign coins at least twen-
ty-five per cent, less than Sterling. (9). In 1707 Parliament
passed an act for the purpose of ascertaining the foreign coin in
circulation in the colonies. In order to make the queen's proc-
lamation effective, a measure was enacted that no person should,
after the first day of May, 1709, pay or receive any other coins
mentioned in the proclamation at a higher rate than that specified
therein, on a penalty of six months imprisonment without bail
or mainprize and a forfeiture of ten pounds for every such
offence. While this act was probably disobeyed in many in-
stances and while its tendency was to depreciate the foreign
coins, it gave to them a nominal value throughout the colonies
which doubtless had some slight influence on trade. In 1783
the general assembly of North Carolina passed an act rating
the foreign gold and silver coin in use in the colony. The
following table shows the kind, weight, and value of each coin:
Gold Coins. dwt. grs. N. Car. Cur.
A Guinea 5 6 1 17 4
Half Guinea 2 15 18 8
French Guinea 5 5 1 16
Moidore 6 18 2 8
Four Pistole Piece 17 6
A Pistole 4 4 1 10
Double Johannes 18 06 8
Single " 9- 0340
Half " 4 12 1 * 12
Quarter " 2 16 . 16
(9) Whitney's "Government of the Colony of S. C.," p. 111.
Silver Coins. dwt. grs. N. Car. Cur.
French Crown 9
English " 9
Half Crown- - 046
Quarter Crown 023
ADollar 17 6080
Half Dollar 040
Quarter Dollar 020
A Pistareen 018
English Shilling 018
It was enacted that this rating should thereafter be read in
evidence in the courts, "to liquidate all Debts and Demands
and in entering up judgments thereon." (10.) This applied to
future debts only. These were the only values at which
these coins were allowed to circulate.
While North Carolina coined no money, it is probable that
some was issued especially for her. In 1660 Lord Baltimore
sent to Maryland the "Baltimore Shilling," which had been
coined in London. Evans says, "The Carolinas, Virginia and
New Hampshire, all followed Maryland in the introduction of a
colonial coinage." (n.) Governor Dobbs in 1754 mentioned
in a letter to the Board of Trade that he had applied to the
treasury for the issuance of copper coinage for the colony.
(12.) It is quite probable that the only coin ever authorized to
be issued from the English mint for general circulation in the
colonies, was a half-penny piece of mixed metal which is called
the "Rosa Americana" It was issued in the reign of George I.
The obverse side contains the head of the Monarch and
the inscription "Georgius Rex." The reverse side con-
tains a crown over a double rose, and the legend "Rosa Ameri-
cana" and a scroll on which are the words " Utile Dulci."
(13) For some time the copper coinage of England consisted
principally of tokens which were issued by private tradesmen
as is, to a large extent, the custom of China with regard to the
coinage of small money. (14.) In Mr. Smiles' "Lives of Bolton
and Watt," Bolton says, "The lower class of Manufacturers
purchased copper coin to the nominal value of thirty-six shill-
ings for twenty shillings in silver, and distributed it to their
work-people in wages so as to make a considerable profit."
(15.) Private individuals were not prohibited from issuing cop-
per coinage until the reign of George III. (16.) Boyne in his
(10) Iredell. "I^aws of N. C., p. 452. (11) Evan's "History of the U. S. Mint and
Coinage," p. 60. (12) C. R. Vol. 5, p. 149. (13) Evan's Aistory of the U. S. Mint
and Coinage," p. 60. (14) Jevons' "Money and the Mechanism of Exchange," p. 65.
(15) Jevon's "Money and the Mechanism of Exchange," p. 65 . (16) Walker's
"Money," p. 168.
"Tokens of the Seventeenth Century" gives a list of nine
thousand four hundred and sixty-six kinds of copper coin
issued by different people. (17.) There was in circulation in
Carolina a token called the "Carolina Elephant." On the
obverse side is the picture of the London Elephant. It con-
tained no legend. On the reverse side are stamped these words,
"God Preserve Carolinaand the Lords Proprietors, 1694." In 1768
the Assembly of North Carolina passed an act encouraging the
importation of the English copper half pence and made it legal
tender for the payment of small debts for a term of five
In the early days of the colony, gold and silver were so
scarce that it was necessary for the colonists to resort to the use
of commodities in order to facilitate the exchange of their pro-
ducts in satisfying their few and simple wants. (19.) This cus-
tom at that time was not peculiar to North Carolina, it was
general throughout the English colonies.
The early inhabitants of North Carolina were mainly farmers.
They settled along the Albemarle and Pamlico sounds and the
rivers running into them. These waters soon became thorough-
fares over which they transported the products of their farms to
their neighbors and to markets. (20.) At first, in the
scarcity of money, they exchanged commodity for commodity
in simple barter. They not only exchanged one article
for another, but they also used commodities in the payment
of their debts. (21.) When a judgment for damage
"to a cerain amount" was rendered by a court, it was usually
recorded as "payable in deer skins, hides, tallow, or small furs,
at country price." (22.) Store houses were established in the
several precincts for the storage of commodities which were
paid to the Lords Proprietors for quit-rents and for lands. (23.)
The price of these several commodities was fixed by the As-
sembly. They were made legal tender at those prices in the
payment of all foreign and domestic debts except in cases
where an agreement had been made to the contrary. (24.) The
following is the first list of barter commodities which were so
rated : (25.)
(17) Ibid, p. 168. (18) Iredell, p. 243. (19) C. R. I, p. 715. (20) Hawks' vol. II, 269,
270, (21) Jevons' "Money and the Mechanism of Exchange," p. 26. (22) "William-
son's "Hist of N. C.," vol. I, p. 163. (28) Williamson's 'Hist, of N. C.." vol. I, p. 163.
(24) C. R. IV, 920; Williamson's "Hist, of N. C.," vol. I, p. 163. (25) C. R. IV, 920, C. R~
Indian Corn, per bushel 1 8
Tallow, per pound - 5
Beaver and Otter skins, per pound 2 6
Butter, per pound 6
Raw buck and doe skins, per pound 9
Feathers, per pound 1 4
Pitch, per barrel (full gauged) 1
Pork, per barrel ' < 250
Tobacco, per cwt 10
Wheat, per bushel 3 6
Leather, tanned, uncurried, per pound 8
Wildcat skins, per piece 1
Cheese, per pound 004
Buck and doe skins, dressed, per pound 2 6
Tar, per Barrel (full gauged) 10
Whale oil, per barrel 1 10
Beef , per barrel 1 10
These commodities were rated in 1715, the year the laws of
the colony were revised. This list as a whole or in part may
have been so used prior to this time. In 1723 the General
Assembly, in order to encourage the hemp, rice and turpentine
industries, added to the list, hemp at 8d. per lb., rice at i and
53. per cwt., and turpentine at i and 53. per bbl. The price
of corn and wheat was raised to two and four shillings respec-
tively per bushel. These commodities were made legal tender
in the payment of all debts domestic or foreign, when delivered
according to the requirements of the Act, except where sterling
had been previously agreed upon.' (26.) In i6i8in Virginia it was
made a penalty of three years hard labor for a refusal to accept
tobacco at three shillings per lb. (27.) This system seems to
have worked well in the early days of the colony when the
settlements were made along the coasts, around the Albemarle
and Pamlico Sounds, and along the rivers. The commodities
were easily and quickly carried by small boats to market. But
as commerce grew, the use of barter commodities became bur-
densome. Sometimes goods of inferior quality were put on the
market, especially those received in payment of debts. In order
to remedy this, in 1764, the Assembly enacted that all flax, flax-
seed, hemp, beef, pork, butter, flour, rice, tar, pitch, turpentine,
lumber, heading, shingles, staves, leather, deer skins, and indigo
should be inspected before being exported. (28.) The chief
difficulty, however, in the use of commodities as money, was
what is called the coincidence of barter. It is not easy "to find
two persons whose disposable possessions mutually suit each
(26) C. R. IV, 203. (27.) Jevons' "Money and the Mechanism of Exchange, p. 26.
(28) C. R. VII, 489.
others wants. There may be many people wanting, and many
possessing those things wanted, but to allow of an act of barter
there must be a double coincidence, which will rarely happen."
(29.) But the conditions of the country were such that barter
commodities were necessary down to the end of the colonial
BILLS OF CREDIT IN THE PROPRIETARY PERIOD.
In 1711 the Tuscarora Indians made war on the colonists,
and probably would have destroyed them but for the timely
aid rendered by South Carolina. The Indians massacred
the women and children, burned the houses, killed and drove
away the cattle, hogs, and horses, and devastated the fields.
(30). The colonists were almost impoverished (31); few even
could supply their families with the necessaries of life. (32).
Their trade had been almost ruined, the few vessels that came
and went carried little else than pitch and tar. (33.) The people
were burdened with debt ; they were in immediate need of
money to pay their soldiers and to meet the expenses of the
government. (34). Under these circumstances, in 1712 the
Assembly decided unanimously to issue ,4,000 in paper cur-
rency called bills of credit. These bills were interest-bearing,
and were to be redeemed at a time specified on the bills, by
means of a duty levied "on all goods exported or imported by
land or water." Treasurers were appointed, whose business it
was to collect the duties and pay the bills at maturity. (35).
These were the first bills of credit issued by North Carolina.
(36). These bills were expected to circulate at the same value
as proclamation money, which they did for a short time, (39)
but, owing to the small amount of revenue collected, and to an
increase in the military and administrative expenses, they
depreciated. In 1712, other bills were issued to the amount of
,8, ooo, increasing the amount in circulation to ,12,000. (38).
Doctor Hawks thinks that the ,8,000 issued in 1712 were the
first bills of credit ever issued by North Carolina. In discuss-
ing these bills he says : "Forgetful of the fact that credit was
but a temporary substitute for cash ; that the day must come at
last when the promise must be redeemed by payment, and that
a violated promise must inevitably destroy the value of the
substitute on which they relied, the Assembly of Albemarle yet
seemed, at first, as far at least as we can discover, to have
(29) Jevon's "Money and the Mechanism of Exchange," p. 3. (30) C. R. I, 827.
(31) C. R.I, 873. (33) C. R. I, 874. (33) C. R. I, 873, 874. (34) C. R. I, 874. (35) C. R. I,
838, 83&. C. R. II, iv. C. R. Ill, 484. (36) C. R. III. 484. (37) C. R. Ill, 485. (38) C.
R. IV, 576.
ordered emissions of the bills without providing any special
sinking fund for their ultimate redemption." (39).
In both opinions Doctor Hawks is in error. (40.) As to the
bills first issued he seems to have overlooked the ,4,000 issue
which took place before the ,8,000 which he claimed were the
first issued. (41.) The act of the Assembly which authorized
the third issue of bills provides for the payment of "the remain-
ing part of the sum of twelve thousand pounds publick Bills of
Credit." (42.) In regard to there being no sinking fund he was
doubtless misled by the supposition that the bills of credit issued
by North Carolina were similar to those issued by Pennsylvania.
(43.) In fact the Assembly provided for the redemption of
these bills by levying a tax on polls and real estate. (44.) This
was the first time real estate was taxed in North Carolina. (45.)
A treasurer was appointed in each precinct whose duty it
was to receive these taxes for the purpose of paying the bills.
It is quite probable that the bills of .8,000 issued were similar
to the bills of the previous issue. (46.) In 1732 Governor Bur-
rington, in a letter to the Lords of Trade and Plantation, after
mentioning the sum of ,4,000 in bills of credit which was issued
in 1712, says: "Afterwards more bills were made much in the
same manner, a Land Tax and a Pole Tax were lay'd to call in
and sink the Bills." (47.) It is evident that he had reference to
the ;8,ooo issue, since the redemption of the next issue was not
dependent on either a land or poll tax. The increase in the
volume of currency by the issuance of the ;8,ooo bills of credit
caused a depreciation of about forty per cent, in the value of all
the bills in circulation. (48.) In 1714 the Assembly authorized
the emission of ,24,000 in bills of credit for the purpose of pay-
ing the Government's indebtedness and of redeeming the out-
standing bills of the .12,000 previously issued. (49.) The Act
directed that the bills should be issued in the following denomina-
300 of 20 3,000 of 20s.
300 of 15 3,300 of 10s.
480 of 10 150 of 8s.
450 of 5 3,000 of 5s.
300 of 3 720 of 2s. 6d.
There was no interest allowed on these bills and no time was
specified for their redemption. (50.) These were, when issued,
(39) C. R. II, pp. 4-5. C. R. Ill, p. 485. (40) Hawks' "'History of N. C." Vol. II, 280.
(41) C. R. Ill, 485. (42.) C. R. 111,177. (43) Hawks' "Hist. N. C.," vol. 2, 280. (44.)
C. R. II, pp. 4-5, C. R. Ill, 485, C. R. IV, 576. (45.) C. R. II, pp. 4-5. (46.) C R. Ill,
485. (47) C. R. III. 485. (48) C. R. IV. 57. (49) C. R. Ill, 179, 485; C. R. IV, 576: C. R.
II, 5. (50) C. R. Ill, 177, 178, 485.
to be placed in the hands of the treasurer on or before the
twenty-fifth day of the following March, and he was required to
pay to the treasurer of each precinct the amounts due to the
persons in their respective precincts. All out-standing bills
were required to be presented to be exchanged for new bills
within six months after the date above mentioned. (51.) Two
years' interest was allowed on the old bills exchanged. Those
who neglected or refused to offer their old bills for exchange
before the twenty-fifth day of the following August, were not
allowed interest thereon, and those who failed to offer them be-
fore the twenty-fifth day of March 1716, would thereby render
The bills of the new issue were legal tender in payment "for
any of the rated commodities of the country, or other money,
except sterling." (52.) The rate of exchange between them and
sterling was fifty per cent. (53.) Any person who refused to
receive them at this value was liable to a forfeiture of double the
value of the bills refused. One-half of this forfeiture was to be used
for the purpose of paying the contingent expenses of the govern-
ment, and the other half became the property of the person who
brought suit against the person so offending. (54.) All persons
convicted of counterfeiting these bills were to be punished as
guilty of felony, without the benefit of clergy. Any member of
the Council who should be guilty of making a motion prejudicial
to the credit of these bills would be subject to a fine of ,20 and sus-
pension from that body at the option of the Lords Proprietors. (55.)
A member of the lower house thus offending would be subject to a
similar fine and expulsion. While the Assembly set no time for
the redemption of this issue of bills, nevertheless several sums
were redeemed between the years 1715 and 1722. (56.) In
1717 the amount of out-standing bills was about sixteen thou-
sand pounds. (57.) In 1722 the Assembly passed a bill author-
izing the issuance of ; 12,000 in bills of credit. The purpose of
this issue was to redeem all the out-standing obligations. It was
thought that this sum would be adequate, although it was only
half as large, inasmuch as many bills would likely be lost or de-
faced. (58.) The act authorizing these bills provided that three
commissioners should be appointed to issue and place them in
the hands of the public treasurer whose duty it was to exchange
them for the old bills in circulation. It was required that all old
bills should be presented for redemption in the new bills, by the
last of August, 1723. A failure to comply with this requirement
(51) C. R. Ill, 178. (52) C. R. Ill, 178. (53) C. R. Ill, 178. (54) C. R. Ill, 178. (55) C.
R. 111,179; (56) C. R. IV, 676. (57) C. R. II, 296. (58) C. R. IV, 178, 419, 576, C. R. II, p. 5.
rendered the bills valueless. (59.) The act further required
that a tax of five shillings per poll should be levied for the pur-
pose of redeeming the old bills. The sheriffs were permitted in
the settlement of their accounts with the treasurer to pay bills of
credit or rated commodities. Where commodities were offered
they were to be delivered at certain specified places on the nav-
igable streams in their respective precincts. These bills were
made legal tender at their face value in the payment of all
debts except in cases where the contract was otherwise. Though
rated at fifty per cent, less than sterling they circulated generally
at the rate of five for one sterling until 1729. (60.) These bills
instead of being printed, were written, and were therefore, easily
defaced and obliterated. So much was this the case that the
amount of currency in circulation was considered- insufficient to
meet the demands of trade. (61.)
THE LAND BANK.
In 1729 the Assembly made a new departure in its financial
legislation. The act which authorized it was, in comparison
with all previous acts authorizing the issuance of paper currency,
a decided improvement. If all requirements had been complied
with, the currency, would under the circumstances, have proved
reasonably satisfactory. The departure consisted in the estab-
lishment of a land bank. (62.) It was not a bank in the modern
acceptation of the term, but an emission of a sum of bills, not
for supplying the wants of the government, but to be lent at in-
terest, to the people on land security for a certain number of
years. Franklin says of such bills, "For as bills issued upon
money are money, so bills issued upon land are in effect coined
land." (Walker, Money, page 323.) The act appointed a
board of commissioners to issue forty thousand pounds in bills
of credit, ten thousand pounds of which were to be used for the
purpose of redeeming the outstanding bills. The amount of the
last issue was ,12,000, but the Assembly calculated on ^2,000
being lost, torn or defaced. (63.) The remaining thirty thousand
were to be placed in the hands of the precinct treasurers to be
lent to the people for a term of fifteen years at six per cent,
interest on land secured by mortgage. (64.) The interest and
one-fifteenth of the principal were to be paid annually. The
amount placed in each precinct was in proportion to the numberof
tithables determined by a census, which was to be certified to on
oath. (65.) Each person who wished to borrow money was re-
(.-,9) Hawks, II, 282. (60) C. R. IV. 576. (61) C. R. IV. 178. (62) C. R. IV, 419, 576.
Iredell, 49. C. R. Ill, 486. (63.) C. R. IV, 576. (84.) C. R. IV. 576. 418. C. R. II, p. 5.
(65) Hawk's 'Hist. N. C.," Vol. II, 283, etc.
quired to execute a mortgage on unencumbered land worth
twice the amount of the loan. On a failure to meet
these obligations the precinct treasurers were empowered to ap-
point an officer whose duty it was to "make distress and sale" of
the personal property of the borrower to the amount necessary to
satisfy the claim.
A mortgage could not be foreclosed until the mortgagor had
failed in three payments. The calculation was that the thirty
thousand pounds placed on interest as described by the act,
would amount to forty-five thousand pounds. This would give
a profit to the bank of fifteen thousand pounds. When fifteen
thousand pounds were paid in, ten thousand pounds were to be
retired and five thousand pounds to be put in circulation by
applying that sum to the payment of the commissioners, the
precinct treasurers, and the expenses of the government. (66).
The borrower of the bills had the option of paying his loan
before the expiration of the specified time, on condition that
he pay three per cent, interest, for the unexpired term, on the
amount borrowed. The new bills were made legal-tender in
all transactions, except in the payment of debts where gold or
silver had been promised. The Assembly claimed the right to
determine each year the rate at which these bills should pass.
(69). These bills were issued the year after the seven Lords
Proprietors sold their interest in North Carolina to the King,
but before the first royal governor came to the colony. Gov-
ernor Burrington came in February, 1730. Soon after his
arrival he declared the Act of 1729, authorizing the issuance of
the forty thousand pounds bills of credit, invalid. (68). His
reason for doing so was that it was passed after the Parliament
had passed the act vesting the rights of the Seven Lords Pro-
prietors in the Crown. (69). He ordered the precinct treas-
urers to refuse to receive the annual installments from the
borrowers as required by the act. (70). They acted in accord-
ance with his wishes, and the amount of currency then in circu-
lation remained about the same during his administration. (71).
This condition of affairs witnessed a great depreciation in the cur-
rency. (72). This action of the governor destroyed the first
land bank in North Carolina. In Pennsylvania the land bank
seems to have been more successful. Governor Pownal, who
had been governor of Massachusetts, South Carolina, and New
Jersey, says of this system: "I will venture to say that there
never was a wiser or a better measure; never one better calcu-
(66) Hawks, II, 286, etc. (67) C. R. IV, 419. (68) C. R. IV, 179. (69) C. R. IV, 179.
(70) C. R. IV, p. 179. (71) C. R. IV, p. 197. (72) C. R. IV, p. 179.
lated to serve the uses of an increasing country ; that there
never was a measure more steadily or more faithfully pursued
for forty years together than the loan office in Pennsylvania."
BILLS OF CREDIT IN THE ROYAL PERIOD.
When Governor Johnston, who succeeded Governor Burring -
ton, came to the colony he issued a proclamation requiring all
precinct treasurers to make a report of their accounts to the
assembly called to meet at Edenton in January, 1734. They
were asked to account for all the money they had received in
accordance with the requirements of the Act of 1729. (74).
They generally responded, but not more than one-tenth of the
money due had been paid. (75). There was at this time a
large sum of quit-rents due the Crown, and also the taxes
levied to meet the expenses of the government since 1729. In
view of these circumstances and the scarcity of gold and silver
in the colony, it was considered by the Assembly unwise to
continue retiring the currency as was required by the Act of
1729. In this crisis they thought that such a contraction
would not leave money enough in circulation to meet
the expenses of the government and pay the quit-rents
due which were at this time demanded to be paid in silver.
(76.) To relieve the situation the Assembly in 1734 passed an
act providing for the emission of forty thousand pounds in
bills of credit. (77.) The bills were to be exchanged for the
bills issued in accordance with the Act of 1729. This issue modi-
fied to some extent the old contract. The principal and the
interest were not to be paid for ten years. This plan furnished
the colonists for that period a volume of currency to the amount
of forty thousand pounds. (78.) In this same year the commis-
sioners were authorized by the Assembly to issue twenty-five
hundred pounds in bills additional to defray the expenses of the
issue. Also, in 1734, another act was passed by the Assembly
granting to the King the sum of fourteen thousand one hundred
and fifty pounds 33. 2d. to be raised by a tax of five shillings
per poll for five years. But in order to meet the immediate de-
mands of the public debts a clause was inserted in the act by
the consent of the Governor authorizing the issuance of ten
thousand pounds in bills of credit as a part of that sum. (79.)
These bills were to be redeemed by this tax and a duty on im-
ported liquors. The amount of outstanding bills of credit at
(73) Walker's "Money," p. 324. (74) C. R. IV, p. 179. (75) Ibid, p. 179. (76) C. R. II,
p. 5. (77) C. R. IV. 179, 419, 577; (78) C. R. IV, 179, (79) C. R. IV, 180, 419. Iredell, 56-
this time was fifty-two thousand five hundred pounds. (80.)
The last issue of bills was not made legal tender and was not
rated when issued. In 1738 the Assembly passed an act appoint-
ing a committee consisting of the Governor, the Council, the
Attorney General, the Speaker, and an equal number of the
lower house to determine annually the value of the bills of
credit in circulation. (81.)
From 1726 to 1740 the exchange between these bills and
sterling was ten to one. (82.) This would make one ounce
of silver worth fifty s. 4d. in paper currency. In 1740 the
Assembly rated the paper currency at 7^2 to i. (83.) In 1739
the Assembly made an effort to pass the paper currency in pay-
ment of quit-rents. The officers declined to accept it and pro-
ceeded to collect them. The Assembly ordered that the officers
should be imprisoned. (84.) Walker says, "The issues of North
Carolina were so much out of proportion to the requirements of
the colony's trade, that exchange on London rose in 1740 to
1400:100." (85.) The outstanding bills which were issued in 1734
were to be redeemed in 1744, but the financial condition of the
country at that time was critical. (86.) This was due in no
srilall degree to the amounts issued by the different colonies in
aid of the expedition against Louisburg. In 1740 one ounce of
silver was equal in value to twenty-eight shillings in Connecticut
paper money. In 1749 the exchange of Massachusetts paper
money on London was 1100:100. (87.) In 1744 the currency
had greatly depreciated and there was a large amount of quit-
rents due the crown and Earl of Granville. The debt of the
colony was large and business was greatly depressed. (88.)
The condition of affairs was so bad that Governor Johnston
said, "not a Man would go twenty miles as an Express on the
Public Faith." (89.) In this crisis, the people demanded
issuance of bills of credit. They were so urgent that Governor
Johnston felt it necessary to favor their demands, although he
had been instructed by the King not to do so. (90). In 1747
an event occurred which determined the action of the governor
in reference to this matter. Several small vessels laden with
armed men came from St. Augustine into North Carolina
waters. Where they landed they did great damage. They
killed many people, burned vessels, stole negroes, and slaugh-
tered cattle and hogs. This aroused the people to the neces-
(80) C. R. IV, 180, 577. (81) C. R. IV, 419. (82) C. R. IV, 419. 5T7. (83) Williamson's
"Hist, of N-C." Vol.11, 56. (84) Williamson's "Hist, of N. C." Vol. II. 42. (85) Walker's
"Money," 325. (86.) C. R. IV, 921, (87) Walkers' "Money," p. 321. (88) C. R. IV. 928.
(89) C. R. IV, 921. (90) C. R. IV, 922.
sity of building forts. To meet this emergency the governor
yielded, and in 1748 the Assembly passed an act authorizing
the issuance of ,21,350 in bills of credit. (91). At the rate of
exchange at that time this sum was equal to ,16,012-10 sterl-
ing. As specified in the act, the bills were to be used as
follows: ,2,000 to build a fort at Ocracoke inlet; ,1,50010
build a fort at Topsail inlet ; .500 to build a fort at Bear inlet ;
,2,000 to build a fort at the mouth of the Cape Fear river ;
< I 5>35 to redeem the outstanding bills of credit and pay the
expenses of the government. (92). The denominations of these
bills varied from 4d. to ,3. In exchanging the new for the
old bills, one shilling in new bills was to be given for seven
shillings and six pence in old bills. They were made legal-
tender in all payments at the rate of four shillings in paper
currency for three shillings sterling. A tax of one shilling per
poll was authorized to be levied as a sinking fund until all the bills
were redeemed. (93). The penalty for counterfeiting these
bills was, for the first offence, whipping not exceeding forty
lashes, standing in the pillory two hours, and having both ears
nailed to the pillory and cut off. For a repetition of the offence
the criminal was to be regarded as a felon and punished accord-
There were ,20,646, 145. of these bills in circulation in 1750,
having maintained the value at which they were issued. (95.) In
1749 the sum of ,189:13:3 had been redeemed, and in 1750 the
sum of ,5 1 3: 1 2:0. (96.) In 1754 a new occasion arose for the
expansion of the currency. A contest commenced which was
eventually to decide whether England or France should be the
mistress of the New World. This war brought the thirteen sep-
arate colonies into a sympathy and confederation which ripened
into a national union of states. Governor Dinwiddie of Virginia,
called on the several colonies for aid in the war. In order to do
her part and meet the expenses of the government, North Caro-
lina resorted again to the expediency of issuing bills of credit.
In 1754 the Assembly passed an act authorizing the issuance of
,40,000. (97.) Commissioners were appointed for stamp-
ing and signing the bills. The bills were to be of the fol-
lowing denominations : 40 shillings, 30 shillings, 26 shillings and
8 pence, 20 shillings, 15 shillings, 10 shillings, 5 shillings, 4 shil-
lings, 2 shillings and 8 pence, i shilling, 8 pence, and 4 pence.
(91) C. R. IV, 922 C. R. VI, 22 1308. C. R. VIII, 213. C. R. IX, 741. Iredell, 115,
134. (92) C. R. VIII. 213. Iredell, 115. (93) C. R. VI, 1308. Iredelt, 117. (94) Iredell,
117. (95) C. R. IV, 1073. (96) C. R. IV, 1072. (97) C. R. V.208, C. R. VI.22, C. R. VIII.213,
(98.) They were to be used for the following purposes : ,12,-
ooo to aid Virginia against the French and the Indians, ,2,000
to improve and defend Fort Johnston, ,1,000 to equip the poorer
soldiers of Anson and Rowan counties with ammunition and arms,
,4,200 to pay the public debts, 7,000 for the establishment of
a public school, ,7,200 to be divided among the twenty-four
parishes to be used for a parish church, glebe, and parsonage.
,2,000 to finish the public buildings of the province, ,2,800
to pay contingent expenses of the government, ,800 to stamp,
sign and pay out the bills. (99.) These bills were to be legal
tender in all business transactions at the rate of ,4 in bills for
;3 sterling. (100.) The penalty for counterfeiting these bills
was, for the first offence, that the convict should be whipped at
the discretion of the court, not exceeding forty lashes and stand
in the pillory for two hours, have his ears nailed to the pillory
and then cut off. For a second offence the offender should be
considered a felon and be punished accordingly without the ben-
efit of clergy. (101.) The act provided that a tax of one shil-
ling per poll and a duty of four pence a gallon on all wine, rum,
or other liquors, imported either by land or sea from any place
except Great Britain, should be levied and collected as a sinking
fund until the bills were redeemed. (102.) In 1755 the Assem-
bly found it necessary to order the ,7,200 which had been ap-
propriated for churches, glebes, and parsonages, and also the
;2,ooo appropriated for the purpose of finishing the public
buildings of the colony, to be applied to the purpose of defray-
ing the expenses of repelling the French and Indians from that
territory claimed by both French and English. (103.) The
amount of out-standing bills in 1754 was ,61,350, four shillings
of which were to be equal to three shillings sterling.
These bills were to be redeemed by a tax of one shilling per
poll and a duty of four pence a gallon on all imported liquors.
This tax and duty were to be paid until all the bills were
redeemed. (104). There were no bills of credit issued from
1754 to 1760. The colonists tried another plan for supplying a
currency. They resorted to the expediency of issuing inter-
est-bearing treasury notes. In 1760, however, the Assembly
authorized the issuance of ^12,000 in bills of credit. (105).
They were issued in the following denominations: ^3, 2, 30
shillings, ^1,10 shillings, five shillings, two shillings and eight
pence, two shillings, one shilling, 8 pence, six pence, and four
(98) Iredell, 157. (99) Iredell, 159, 160. C. R. VIII, 213, C. R. V, 109. (100) C. R. VI,
1308. Iredell, 158. (101) IredeJl, 158. (102) C. R. VI., 1308. C. R. VIII, 213, Iredell, 160.
(103) C. R. V, 279, Iredell, 168-1G9. (104) C. R. VI, 1309. (105) C. R. VI, 1309. Iredell, 192.
pence. (106). They were made legal-tender in all transactons
of business at the rate of four shillings in bills for three shil-
lings sterling. They were issued for the following purposes :
,7,000 were to be used in pay ing the expenses of an expedition
against the Cherokee Indians ; ,3,000 were issued for the pay-
ment of the public debts ; ^2,000 were to be used in the pay-
ment of rewards for killing Indians. It was required of the
person who wished to claim such a reward that he present the
scalp of the Indian to the Assembly and take an oath that he
had killed the Indian or was present at the killing, and that he
had received no reward from the government. If the claimant
were on pay, he was entitled to a reward of five dollars. If
not, he was entitled to a reward of ten dollars. (107). These
bills were to be redeemed by a tax of one shilling per poll, to
be levied in January, 1763, and continued until all the bills of
this issue had been redeemed. (108). Counterfeiting these
bills was to be regarded as a felony, and was to be punished
In 1761, the Assembly authorized the emission of ,20,000
bills of credit, for the purpose of raising and equipping forces to
assist Virginia and South Carolina. The bills were made legal
tender in all transactions as proclamation money. They were
issued in the following denominations; ^3, forty shillings, thirty
shillings, twenty shillings, fifteen shillings, ten shillings, five
shillings, four shillings, three shillings, two shillings and six pence,
two shillings, one shilling, eight pence, six pence, and four pence,
(no.) A provision was made in the act for the redemption of
these bills by levying a tax of two shillings per poll, commencing
in January, 1764, and continuing until all the bills of this issue had
been retired, (in.) Counterfeiting these bills was considered
a felony and was to be punished accordingly. This was the last
emission of bills of credit by North Carolina until she became
independent. In 1764 Parliament passed an act prohibiting the
colonies from issuing bills of credit with legal tender value.
In 1756 the assembly passed an act granting the King an aid
of ^3,400 for the purpose of defraying the expenses of con-
structing a fort and for equipping and paying two companies of
soldiers for the protection of the western frontier. (113.) This
(106) Iredell, 192. (107) Iredell. 193. (108) C. R. VIII, 214. Iredell. 183-194. (109).
Iredell, 194. (110) Iredell, 198, 199. C. R. VII, p. 214. (Ill) Iredell. 199. (112). Whit-
ney's "Government of the Col. of 3. C." p. 114. Walker's "Money, ",'p. 324. (113) C.
R. V, p. 678,687, 798.
sum was issued in treasury notes at the rate of proclamation
money, bearing interest at six per cent, from the date of issuance
until November loth, 1757. These were simple interest bearing
promissory notes. They were to be redeemed by a tax of two
shillings per poll and a duty of two pence per gallon on all im-
ported liquors for a year. (114.) The surplus was to be applied
to the payment of the contingent expenses of the government.
(115.) In 1757 an additional sum of ^5,306 in treasury notes
was issued for the purpose of assisting South Carolina. These
notes were to bear interest at six per cent, until September 29,
1758. They were to be redeemed by levying a tax of four
shillings and six pence per poll for that year, and a tax on law
suits for two years. (116). There was issued the same year
the sum of ,9,500 in interest-bearing treasury notes, which
was to be paid by a tax of six shillings and six pence per poll
for a year, the rate of interest being 6 per cent. The surplus
interest was to be applied to the payment of the contingent
expenses of the government. (117). ,2,500 of this appropria-
tion were to be used in payment of the debts of the colony,
and the remaining ,7,000 were to be used for the payment of
the military expenses of the colony. (118). In 1758, the sum
of ,7,000 of treasury notes was issued. These notes were to
bear interest at six per cent, until December 12, 1759. They
were issued for the purpose of increasing and maintaining the
colonial forces under the command of Brigadier General Forbes
and for garrisoning the forts along the Atlantic coast. (119). The
denominations of the notes were as follows : ,2,000 of 10 shill-
ings ; ^4,000 of 20 shillings ; ,1,000 of 40 shillings. (120).
These notes were to be paid by levying a tax of four shil-
lings and six pence per poll for a year, and a duty of two pence
per gallon on all imported liquors for a period of four years.
The surplus was to be applied to the payment of the contingent
expenses of the government. (121).
In November of the same year, the sum of ,4,000 of
treasury notes was issued to be used in garrisoning Fort John-
ston and Fort Granville, and for other purposes. (122.) These
notes were to bear interest until June loth, 1761. Provision was
made for their redemption by levying a tax of three shillings and
a penny per poll for a year. The surplus of this tax was to be
used in payment of the contingent expenses of the government.
(114) C. R. VI, 1309. C. R. VIII, p. 213. (115) C. R. VIII. p. 213. (116) C. R. VI, 1398.
C. R. VIII, 213. ,(H7) C. R. VI 1309. Iredell, 214. (118) C. R. VIII, 214. (119) C. R.
V, 1003. C. R. VI, 1310. C. R. VIII, 214. Iredell, 182. (120) C. R. V, 1003. (121) C. R.
Y, 1003. C. R. VI, 1310. (122) C. R. VIII, 214. Iredell, 183.
(123.) In 1759, the sum of .5,500 of interest bearing treasury
notes, which had been borrowed from different funds, was re-
issued as non-interest bearing notes. This issue, therefore, did
not increase the number of treasury notes in circulation, author-
ized. A tax of a shilling per poll was levied for three years for
the purpose of redeeming them. (124.) According to the
financial report made to the Governor in 1764 there had been
issued since 1747 ,93,350 in bills of credit and .30,776 of in-
terest-bearing notes including interest, making in both bills of
credit and interest bearing notes the sum of ,124,126. The sum
of .49093: 1 5:10 including principal and interest had been re-
deemed, leaving 75032:4:2 unredeemed. This sum was to be
redeemed by a tax of four shillings per poll and a duty of four-
pence per gallon on all imported liquors. Both of these sources
of revenue were authorized to be continued until all of this sum
should be retired. (125.) The following table will show the
amount of both bills and notes redeemed each year. (126.)
When Burned. Bi Interest Notes.
s. d. s. d.
1749 April 14 ........... 189 13 3 ........
1750 April 6 ............ 513 12 ........
1751 OctoberO .......... 527 14 4 ........
1752 April 10 ........... 1,090 17 6 ........
1753 April 11 .......... 739 6 8 ........
1754_February .......... 337 17 3 ........
1755 January 11 ........ 958 1 4 .......
October 15 ........ 938 15 10 .........
1756 October 21 ........ 1,809 5 .......
1757 Nov. 29 ........... 1,986 13 5 2,540
1758 December 22 ...... 1,701 10 11 7,843
1760 January 9 ......... 1,143 5 4 ........
May 27 ................... 1,260 19 3
December 1 ....... 1,479 2 5 3,113 3
1761 April 21 ........... 105 13 3 513 1 3
1762 April 27 ........... 2,057 19 111 5,124 14 9
December ......... 1,710 15 11 1,119 8 9
1764 March 7 ........... 1,140 9 8 1,673 12 6
November ........ 7,171 8 1,958 10 1
17C6 November ........ 3,786 7 8 1,711 11 22
1768 January ........... 7,774 9 7 ........
37,162 7s. 4d. 26,857 18s, Od.
In 1767 England considered the advisability of furnishing a
currency for the use of the colonies. Three plans were con-
sidered : (a) for England to furnish an interest-bearing medium
(123) C. R. VI, 1310. C. R. VIII, 214. Iredell 1S3. (124) C. R. VI, 131U. (126) C. R.
VI, 1310. 1311. (iJiG) C. R. VIII, 215.
to be put in circulation by paying the army and the navy, and
by means of a loan to the several colonies; (b) for the establish-
ment of a bank connected with the bank of England, to be
known as the Bank of America, with the authority to issue notes;
(c) for taking the financial affairs of the colonies from Parlia-
ment and placing them in the hands of the Crown and boards
as was originally the custom. (127.) This last plan, if it had
been adopted, would have repealed the restrictive acts of Par-
liament, and would have permitted the colonies to issue bills on
three conditions: (a) that the amount fixed by Parliament
should not be exceeded nor increased afterward without the
consent of the Crown ; (b) that when an issue of bills was made
all debts were to be secured and were not to suffer any loss by
such omissions ; (c) that all sterling debts should be paid in
sterling value, and all contracts should be kept. (128). In 1768
the Assembly authorized the issuance of the sum of ,20,000
in certified notes for the purpose of paying the soldiers to sup-
press an insurrection on the western frontier, and meeting other
demands. These notes were not made legal-tender. Such an
action would have been contrary to the spirit of the act of
Parliament passed in 1764. They were only promissory notes,
but money was so scarce at that time that they circulated as
freely as if they had been bills of credit. (129).
In 1771, the Assembly authorized the issuance of ,60,000 in
debenture notes for the purpose of paying the expenses of Gov-
ernor Tryon's war against the Regulators. These notes did not
bear interest. They were to be redeemed by a tax of two shill-
ings per poll for a period of ten years, unless sufficient funds for
that purpose were available sooner. (130.) Although the
colonists needed more money, this measure was unpopular.
Governor Martin had been instructed to call a new Assembly,
but he was advised that a new assembly would not favor such a
measure. He, therefore, referred the matter to the old Assembly
which had authorized the levy of soldiers for the expedition.
Some members of the Assembly had served in this war. (131.)
In 1771 a report was made to the Assembly by the Clerk of the
Committee of Accounts showing that the sum of ,4,340:7:6
more of special taxes had been collected than should have been.
(132.) In view of this fact the Assembly passed an act to dis-
continue the collection of these taxes. The Governor charac-
terized this act "as teeming with fraud," and refused his assent.
(127) C. R. VIII, 517. (ISM) C. R. VIII, 517. (128) C. R. VIII, 21*. Iredell. 213. (130)
C. R. IX, v., 72, 76, 221, 260. Iredell, 258. (131) C. R. IX, xii. (1132.) C. R. IX, xvi.
(I33-) The Assembly, anticipating his intention, had prepared
resolutions to discontinue these taxes and indemnify the sheriffs
for not collecting them. These resolutions were intended to be
recorded in the journal, but the Governor, aware of this inten-
tion, dissolved the Assembly immediately after rejecting the act.
Colonel William L. Saunders says: "Mr. Speaker Caswell com-
municated the purport of the resolves to the treasurers as an
order from the Assembly and thereupon the taxes in question
were omitted from the tax lists sent down to the counties for
collection." (134.) The Governor issued a proclamation in-
structing the sheriffs to continue the collections. (135.)
The trouble between the Assembly and the Governor over the
tax question continued till the close of the colonial period. (136.)
The history of the currency of North Carolina during the
colonial period shows the use of a great variety of commodities
and many examples of inconvertible paper issues in addition
to the gold, silver and other coins. The early inhabitants with
the small amount of gold and silver they possessed were unable
to exchange the products of their industry without relying largely
on the use of barter commodities. We find the paper currency
of this period based on land, on taxes, and on the credit of the
colony. The Assembly issued paper currency to pay the ex-
penses of war, to meet the demands made on the treasury, and
to lend to the people for the purpose of encouraging industry.
The spirit North Carolinia has shown in her financial legislation,
limited as she was by England's commercial and financial policy,
is in the main commendable. Few bills or notes were issued for
which she did not at the time make provision for redemption.
We are not aware of any that the Assembly did not attempt to
redeem. In 1772 Governor Martin refused to endorse an act
authorizing the issuance of the sum of ,120,000 in debenture
notes for the purpose of redeeming the outstanding debenture
notes and bills of credit. He refused his assent because he re-
garded it inconsistent with the act of Parliament passed in 1764,
concerning the issuance of bills of credit. (137.) The debenture
notes issued in 1771 were the last paper currency North Caro-
lina issued before she became independent. In 1775, feeling
no longer the restrictive influence of Parliament, she returned to
the policy of issuing bills of credit.
(133.) C. R. IX, pp. xvi, xvii. (134) C. R. IX, xvii. (135) C. R. IX, xvii. (136) C, R.
IX, xix. (137) C. R. IX, 258.
Edwin Wexler Kennedy was born in Tennessee August 25th,
1857, received his preliminary education in the public and
private schools in Blount county, and the degree of A. B. from
the University of Tennessee in 1880 ; taught in the Knoxville
city schools, Tennessee, and in the Goldsboro city schools,
North Carolina ; was for twelve years superintendent of the
Durham city schools, North Carolina. From 1895 to l8 97 he
was instructor in history in the Woman's College of Baltimore,
and from 1894 to 1897 he was a graduate student in the Johns
Hopkins University. His studies were History, Jurisprudence
and Politics, and the subject of his thesis, "Quit-rents and Cur-
rency in North Carolina, 1663-1776."
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